Germany’s war on Keynes

Austerity’s been the name of the game as Europe fights its sovereign debt crisis. At last night’s EU summit in Brussels, Angela Merkel scored one of her biggest wins yet, pushing through a “debt brake” that’ll force participating countries to keep their federal deficits under 0.5% of GDP. It’s about as anti-Keynesian as you can get, and most American economists would consider it bad policy in a recession.

But there are hardly any Keynesians left in German economics departments. The reason goes all the way back to the Nazis, and beyond.